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Canadian Newcomer Financing: How does one turn a fistful of dollars into a fortune?

On one hand there&rsquo;s the tale of an immigrant neurosurgeon now driving a cab, on the other is the Canadian newcomer who turned a handful of cash and a truck-load of initiative into a business empire.

Mon., Nov. 5, 2012

On one hand there’s the tale of an immigrant neurosurgeon now driving a cab, on the other is the Canadian newcomer who turned a handful of cash and a truck-load of initiative into a business empire.

So how does one turn a fistful of dollars into a fortune? And what help is there for entrepreneurial immigrants with a business idea, and no financing?

There are a slew of organizations offering mentoring and other services to small businesses and startups, including several founded by new Canadians.

Financing, though, is harder to come by.

“It’s hard to start a business as a newcomer.” says Alejandro Monsivais, who came to Canada from Mexico a decade ago and started his food and catering company, Mexicatessen, in 2008. “But I’m not complaining, this is a safe and secure place for business.”

Unable to get a bank loan, he found micro-financing through ACCESS, a community program that offers help to those with good ideas and a willingness to take business training.

But money isn’t easy to come by for most newcomers, says Patricia Rimok, president of ib2ib Immigration Business Network, an organization that helps immigrants find financing and other support.

“There are virtually no systemic or direct support services for business immigrants, and we wanted to fill that gap,” she says.

The lack of financing or access to capital assets is identified as the main barrier to starting a business for new Canadians, according to a December 2011 a study conducted by Maytree, a foundation that offers programs and grants to reduce poverty, and the Metcalf Foundation, which works to end scarcity and build communities.

The BDC offers financing, venture capital and consulting. It was created to help small and medium sized business in Canada, and while not specifically aimed at immigrants, it does offer support and financing options for aboriginal, female and young entrepreneurs.

This was created in 2011 by the Business Development Bank of Canada and the Canadian Youth Business Foundation, a national charitable organization aimed at young people. Under the program, permanent Canadian residents can receive up to $15,000 on the strength of a business idea. The catch? The program is limited to those between the ages of 18 and 34. Applicants must also have lived in Canada fewer than 36 months and be fluent in French or English.Canada Small Business Financing Program

According to the Maytree and Metcalf report, financing support is available to immigrants via standard bank loans under this program. However, the document also warns that the program has been criticized for having a cumbersome approval process.The Ontario Self Employment Benefit

This 42-week program, aimed at the general public, offers a business start-up training program with both workshops and one-on-one coaching, and stipend of about $400 a week, some of which must be reinvested in a new business venture. While immigrants are not explicitly excluded, eligibility requirements automatically eliminate many people, including former business owners and newcomers without a work history in Canada.

Micro loans

The ACCESS Community Capital Fund offers micro-loans to those without collateral or credit history who show a commitment to succeed — demonstrated through participation in a business training course, for example — and a strong business plan. The FirstOntario Micro Loan Program, in Hamilton, is a partnership between FirstOntario the Immigrant Women’s Centre, Today’s Family, and the Welcome Inn Community Centre. Applicants must complete a business education program and receive a letter of recommendation from a community partner to be eligible for a loan, starting at $500. If the first loan is repaid, entrepreneurs can then apply for up to $2,500.

So, while finding financing is never easy, it also isn’t impossible. And being an immigrant isn’t necessarily a disadvantage.

“Canada is under-capitalized as a country,” says Ray Cao, who was born in Shanghai but raised in Canada. He has helped start two technology-based companies, which he has both self-funded and financed through venture capital.

“The ability to find financing can depend on the kind of business, then it’s about having a great idea, a great team and great traction,” he says. “That’s the most critical aspect, not where you come from.”

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